Probate Valuation: How an Estate and a House Are Valued

A probate valuation is the open market value of everything the person owned on the day they died, meaning the price each asset might reasonably have fetched if it had been sold that day. A house is valued by an estate agent or a chartered surveyor, and anything worth over £1,500 can be professionally valued.

That figure decides whether there is inheritance tax to pay, it goes on forms that HMRC may check, and years later it becomes the starting point for capital gains tax when the house or the shares are sold.

Probate Value Is the Open Market Value at the Date of Death

The legal test sits in section 160 of the Inheritance Tax Act 1984: the value of any property is the price it “might reasonably be expected to fetch if sold in the open market at that time”. GOV.UK’s guide to valuing an estate puts it in everyday terms: for cars, jewellery and paintings, you work out how much you would have got if you had sold them, and online marketplaces are a fair place to look.

The date is fixed, so the value is the one on the day of death, whatever the market has done since. The price is what a buyer would have paid, which for jewellery and furniture is usually well below the insurance figure on the policy.

Which Assets Need a Professional Valuation

Most of an estate values itself. You write to the bank, the building society, the pension provider and any company the person held shares in, enclose a copy of the death certificate, and ask for the balance on the date of death. Those replies give you exact figures and involve no judgment.

Judgment comes in with property, land and possessions of any worth. Ordinary household goods and electrical items you can estimate yourself.

In practice I arrange a professional valuation for the house, any other property or land, and any jewellery, art, antiques or collection that might pass the £1,500 mark. Photographs of the contents taken before a house is cleared cost nothing and answer a lot of later questions.

Where the person owned a home as joint tenants with a spouse or civil partner, you take half the value. Where they owned it as joint tenants with others, such as siblings, you divide the value by the number of owners and take 10% off the share, so a £200,000 property owned by four people gives a £45,000 share. For tenants in common, you work out the value from the person’s own share.

How a House Is Valued for Probate

A house is usually the largest figure on the form and the one HMRC is most likely to look at. Either an estate agent or a chartered surveyor can value it.

An estate agent’s appraisal is a market opinion, often given in the hope of being instructed to sell, so it can lean high to win that instruction or low to promise a quick sale. Where there is no inheritance tax to pay and the house is an ordinary home, a written date-of-death figure from more than one agent is a reasonable basis for the form.

A chartered surveyor’s valuation is a formal written report. A RICS-registered valuer inspects the property, checks the deeds, any lease and anything else that affects the price, and gives a date-of-death value backed by comparable sales.

I instruct a surveyor whenever the estate is anywhere near the £325,000 inheritance tax threshold, or the £500,000 it can rise to when the home passes to children or grandchildren, whenever the house is likely to be sold, and whenever the property is a farm, business premises or land with development value.

What a Probate Valuation Costs

I cannot give you a single national figure for a valuation, because the fee turns on the property. Some estate agents appraise a house for free and others charge a small fee. A RICS valuer charges a fee for a formal report, set by the size, location and complexity of the property, and a specialist valuer for jewellery or art charges separately.

Ask for the fee in writing before you instruct anyone.

Where I handle the full administration, arranging the valuations is part of the £1,880 fixed fee, as my probate cost page sets out. I find the valuers, give them the deeds and the date of death, check their reports and put the figures on the forms. The valuer’s own fee, where there is one, is a separate cost the estate pays, in the same way as the court fee.

How the Value Feeds the Inheritance Tax Forms

Once every asset has a date-of-death figure, the totals decide what you report. Most estates are excepted estates, which need only an estimated value with the probate application. Where inheritance tax is due, or the estate does not count as excepted, you report full details on form IHT400 within 12 months of the death and before you apply for probate.

The tax itself is due by the end of the sixth month after the death, and after that interest runs at 7.75%. Valuing an estate can take several months, so the valuations belong in the first few weeks.

HMRC can check the figures you send, and its checks may include the Valuation Office reviewing any valuation you provide. If the Valuation Office decides an asset is worth more, HMRC sends new calculations once the value has been agreed. If you have not heard from HMRC 14 weeks after submitting the IHT400, no further checks will be carried out.

What Happens If the Value Is Wrong

You put a wrong value right on a corrective account, form C4, and you send it once the values are final or 18 months after the death, whichever is sooner. Some changes have to be reported earlier, including a change in the value of land or buildings, a sale of land or shares at a loss, or the estate’s value moving by more than £50,000 before exemptions and reliefs. You calculate the extra tax and make a payment on account so that interest stops building.

Penalties depend on how the error happened. HMRC’s factsheet on inaccuracy penalties says there is no penalty where you took reasonable care and the return was still wrong. A careless error costs 0% to 30% of the extra tax where you tell HMRC first, and 15% to 30% where HMRC finds it.

Deliberate errors carry up to 70%, and up to 100% where they were concealed. A surveyor’s written report is the best evidence of reasonable care I know of.

Values can also fall. If the executors sell land or buildings at a loss within 4 years of the death, they can claim relief on form IHT38. Shares sold at a loss within 12 months are claimed on form IHT35.

A Low Valuation Can Raise Capital Gains Tax Later

The probate value is also the capital gains tax starting point. Under section 62 of the Taxation of Chargeable Gains Act 1992, the personal representatives are treated as acquiring the assets at their market value at the date of death, and a beneficiary who inherits an asset takes over that same acquisition. Where inheritance tax is chargeable, section 274 makes the value agreed for inheritance tax the market value for capital gains tax as well.

On an estate with no inheritance tax to pay, section 274 does not lock the figure in, but it is the figure the executors gave, and claiming a higher base cost later means proving the house was worth more on the day of death. Say a house went in at £400,000 and the executors sell it eighteen months later for £440,000. Personal representatives pay capital gains tax at 24% from 6 April 2026, so a £40,000 gain costs £9,600 before costs and allowances.

Had a surveyor valued the house at £430,000 at death, the gain would have been £10,000 and the tax £2,400. On an estate with no inheritance tax to pay, a low appraisal saves nothing.

When to Hand the Valuation to a Specialist

Families can value a simple estate themselves: a few bank accounts, a pension and ordinary contents, with no property and a total well under the threshold. Bring in help when there is a house near the threshold, a property to be sold, joint ownership with someone other than a spouse, land, a business or valuable possessions, or when HMRC writes about a figure.

If the house may be sold soon after the death, read whether you can sell a house before probate first, because GOV.UK says you should not put property on the market until you have the grant. The probate valuation is one of several duties an executor carries.

If you would rather hand the whole estate over, my probate assistance service covers the valuations, the inheritance tax forms, the grant and the distribution on one fixed fee, and you deal with me throughout. Call me on 020 8669 1779, or leave your details and I will call you to talk it through.